Question1

Monthly production costs in Pesavento Company for two levels of production are as follows.
| |Cost |3,000 units |6,000 units |
| |Indirect labor |$10,000 | |$20,000 | |
| |Supervisory salaries |5,000 | |5,000 | |
| |Maintenance |4,000 | |7,000 | |

Indicate which costs are variable, fixed, and mixed.
|Indirect labor |[pic] |
|Supervisory salaries |[pic] |
|Maintenance |[pic] |

A variable cost would remain the same on per unit basis, while a fixed cost would remain the same in total.
Supervisory salaries would be fixed as it is same at both levels
For other costs we calculate cost per unit
Indirect labor = 10,000/3,000 = 3.33 and 20,000/6,000 = 3.33 and so it is a variable cost
Maintenance = 4,000/3,000 = 1.33 and 7,000/6,000 = 1.17 and so it is a mixed cost as the per unit changes as also the total changes

Question 2.

Bruno Manufacturing Inc. has sales of $2,200,000 for the first quarter of 2010. In making the sales, the company incurred the following costs and expenses.
| | |Variable |Fixed |
| |Cost of goods sold |$920,000 | |$440,000 | |
| |Selling expenses |70,000 | |45,000 | |
| |Administrative expenses |86,000 | |98,000 | |

Complete the CVP income statement for the quarter ended March 31, 2010.
|BRUNO